Meeting Date:
Wednesday, January 19, 2011
CFTC Staff:
Dan Berkovitz
Julian Hammar
Lee Ann Duffy
Mark Fajfar
Jeff Burns
Susan Nathan
David Taylor
Irina Leonova
Tom Leahy
Jeff Steiner
Peter Sanchez
Organization(s):
National Rural Electric Cooperative Association
American Public Power Association
American Public Gas Association
Large Public Power Council
ACES Power Marketing
Schiff Hardin LLP
Wilmer Cutler Pickering Hale and Dorr LLP
External Attendees:
Russell Wasson (National Rural Electric Cooperative Association)
Julie Barkemeyer (National Rural Electric Cooperative Association)
Susan Kelly (American Public Power Association)
David Schryver (American Public Gas Association)
Noreen Carter-Roche (Large Public Power Council)
Jeffrey Walker (ACES Power Marketing)
Patricia Dondanville (Schiff Hardin LLP)
Paul M. Architzel (Wilmer Cutler Pickering Hale and Dorr LLP)
Josh Kans (SEC)
Peter Curley (SEC)
Additional Information:
NFPEEU, as a whole, stressed that they are not financial entities, engage in no speculation and perform a public service.
NFPEEU believes its members are in a special situation because they are all non-profit entities and any increased costs they bear must be passed directly to ratepayers (i.e.., they do not have shareholders to absorb losses). Also, in terms of their use of swaps, they are required to enter into a variety of different types of customized swaps to reduce the risks of energy commodity price fluctuations because they are mandated to provide continuous electric service to their customers and must deal with a variety of variable conditions, such as changing weather patterns and different sized customer bases. The swaps they use are mostly energy commodity swaps.
NFPEEU commented on several rulemakings.
Special Entity Provisions: Reiterating comments they submitted in response to the Advance Notice of Proposed Rulemaking in the fall 2010, NFPEEU is concerned that their members who are municipalities will be required to follow the special procedures applicable to “special entities.” NFPEEU believes these procedures should not apply where the municipality enters into a swap that relates to a commodity (e.g., electricity) that the municipality is obligated to deliver. In these instances, the municipality is akin to an “expert” in the commodity and so does not need the protections provided to special entities.
